CFD Indices – Rising Treasury Yields Led To 2% Wall Street Decline

Market News

  • All three major U.S. stock indexes slid nearly 2% or more on Tuesday in a broad sell-off driven by rising U.S. Treasury yields, deepening concerns over persistent inflation, and contentious debt ceiling negotiations in Washington. It was the S&P 500 index’s biggest one-day percentage drop since May, and the Nasdaq’s largest since March 2021.
  • U.S. Treasury yields continued rising, with 10-year yields reaching their highest level since June, as inflation expectations heated up and fears grew that the U.S. Federal Reserve could shorten its timeline for tightening its monetary policy.
  • Treasury Secretary Janet Yellen said she expected inflation to end 2021 near 4% and warned lawmakers their failure to avert a government shutdown as the nation moves closer to exhausting its borrowing capabilities could cause “serious harm” to the economy.

Market Views

  • Asia Pacific stocks were mostly down on Wednesday morning after their U.S. equivalents recorded their worst day since May 2021 and bond yields climbed on concerns about inflation. Hang Seng index fell 88 points and Nikkei 225 index slumped 741 points.
  • Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 1.06% to $78.25 per barrel. U.S. crude futures shed 1.1% to $74.45 per barrel.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation : Long @ 34,770
Last : 34,441
Target price: 35,600
Protective stop: 34,450 Triggered

This index is having a correction and it is currently sitting at the Fibonacci 50% correction point of the rally from 33,611 to 35,064. As long as price can stay above this level or at the lower Fibonacci 62% point of 34,160, there is chance for price to move higher again. Stochastic is rising now. MACD is still bearish but had a bullish crossover.

Trading Idea
Buy 34,770 with a stop below 34,450 for 35,600. Entry and Stop were triggered on 28 Sep.

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 24,330
Target price:
Protective stop:

Price violated the previous low support zone on 20 Sep with a bearish long candle. It is now struggling to move back inside the consolidation zone again. The 20EMA comes in as a resistance at 24,910 as well. Stochastic is at the oversold region. MACD remains bearish.

Trading Idea
Wait for better trading idea.

Nasdaq 100 Index
(CFD Symbol: USTEC)
Trend :
Recommendation : Long @ 15,300
Last : 14,854
Target price : 15,690
Protective stop: 15,100 Triggered

This index has been moving within a rising channel since Sep 2020. The corrective rally was capped by the 20EMA resistance and price continues to move lower. We could see price heading lower towards the lower channel boundary at 14,470. Stochastic is falling now. MACD is still bearish

Trading Idea
Buy 15,300 for 15,690 with a stop below 15,100. Entry and Stop were triggered on 28 Sep.

S&P 500 Index
(CFD Symbol: US500)
Recommendation: Long @4455
Last: 4374
Target price: 4540
Protective stop: 4410 Triggered

Price is in correction again after being resisted by the 20EMA which is acting as resistance at 4433. As long as the previous low is not violated, there is chance for price to move higher again. Stochastic is rising now. MACD has turned bearish.

Trading Idea
Buy 4455 with a stop below 4410 for 4540. Entry and Stop were triggered on 28 Sep.

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